Two More Suspects In Wake Schools Fraud Scheme Arrested

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RALEIGH, N.C. — Two more suspects in a suspected multi-million dollar fraud scheme involving the Wake County Public School System were arrested Thursday and charged with being accessories after the fact.

Pam Stewart, a former team leader, and Angela Malloy-Sanders, a former quality control manager, both worked at the school system's transportation department until August 2004 when they resigned amid the investigation. According to indictments released earlier this month, they lied to investigators to cover up the fraud.

Both women were released from jail on a $100,000 unsecured bond.

Their former manager, Vern Hatley, has already pleaded guilty and agreed to a between a 58- and 79-month prison sentence; sentencing however, has not been handed down, pending the outcome of the investigation. Another employee, Carol Finch, a former budget analyst, is also in jail; her case is pending.

Investigators say the former employees worked with two managers from Barnes Motor & Parts, a Wilson-based automotive parts company where transportation employees would allegedly submit orders for fake parts as a way to siphon money for personal purchases and unauthorized supplies.

Stewart and Malloy-Sanders are cooperating with the Wake County Board of Education's attorney; both returned furniture and other purchases and promised to each pay back $40,000.

Stewart and Sanders are expected to enter plea agreements in the next two weeks.

Investigators identified $3.8 million in fraud by looking at a small snapshot in time. The total amount of fraud may never be known, but the school system has recovered $2 million from those charged in the scheme.